Definition
A strong dollar buys more foreign currency than before; a weak dollar buys less.
The story
A stronger dollar makes imports and foreign travel cheaper for Americans, but it makes US goods pricier abroad and shrinks what US companies earn overseas when they convert it back into dollars. Because gold and oil are priced in dollars, a stronger dollar makes them more expensive for buyers using other currencies, which can weigh on their prices.
Why markets watch it
Dollar moves ripple into company earnings, commodities and inflation, so coverage tracks them closely.
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We explain why it moves markets. What you do with it is your call. Commentary and education only. Not financial advice. All terms